Advisers must keep investing in tech to 'build anything of value'

Speaking at The Verve Group’s Evolution conference last month (September 27), Smith told advice professionals that one of the key learnings he has had over the years is that the hard work really only begins after getting the tech off the ground.

Firms tend to run better when they have a dedicated tech or infrastructure person — Andrew Smith, Nucleus

Smith was part of the team that built Nucleus’s award-winning financial platform and having been at Nucleus from the very beginning, he has witnessed first-hand the changes the world of fintech has gone through.

“Launch is day one of the investment and you have to keep investing for years to build anything of value,” he said. 

“Even now you see businesses announce thousands of pounds on a tech investment and say ‘done’ but that’s only the initial build, the actual hard work comes after that.

“Businesses just don’t realise how much ongoing investment is needed in tech, and that’s a challenge. You have to keep going with it and it’s only after it is in the hands of the users and they are familiar with it, that you can start to realise some of the problems that you are trying to solve.” 

Smith was joined on a panel by Timeline chief executive, Abraham Okusanya and AdviceFront chief executive, André Costa to discuss how advice firms can further use technology to enhance their businesses and to offer tips to firms who are thinking of building their own. 

Okusanya, whose firm Timeline specialises in planning technology and portfolio management for advice firms, told the audience that a lot of the tech firms used today are single point solutions, for example cash flow modelling or fact finding. 

But he anticipates an increase in the speed and a reduction in the cost at which new solutions are offered in the coming years. 

“From where we were coming from when single point solutions were a massive improvement, the direction of travel I see is that we are going to see more and more composite tools, or bundling coming to the market,” he said before adding that a lot of the tools on the market at the moment are not up to scratch.

But in Smith’s view, not all advisers will choose to embrace technology.

“I suspect there will be a split between some advisers who want to do more with tech, and those who want to do a lot less,” Smith said. 

“That’s because tech is hard, it requires continuous improvement, so there will be a big cohort of people who will just want it packaged in a box.”

AdviceFront’s Costa, whose technology simplifies and automates part of the advice journey, agreed with this and said he believes a lot of people do not want to do much with technology, “they just want it to work so that they can focus on the client".

A key takeaway from the discussion was the value of having a technology specific role in a firm. 

“My observation, having worked with many advice firms over the years, is that firms tend to run better when they have a dedicated tech or infrastructure person who can look after the technology side of things, and let the adviser team get on with advice,” Smith said. 

“You see that more and more with companies hiring CTOs, and that takes a lot of the heavy lifting and enables the actual business leaders to get on with the real value added business.” 

jane.matthews@ft.com